How to Battle Climate Change and Poverty Together

World Bank President Jim Kim yesterday put climate change at the center of the fight against extreme poverty, part of an effort since he began his tenure to link the two looming global problems.
Credit: World Economic Forum via Wikimedia Commons

World Bank President Jim Kim yesterday put climate change at the center of the fight against extreme poverty, part of an effort since he began his tenure to link the two looming global problems.

Speaking at the opening of the bank's spring meetings, he noted that fewer than 100 people control as much of the world's wealth as the poorest 3.5 billion combined. Meanwhile, about 1 billion people earn less than $1.25 per day. In 16 countries, according to a new report released yesterday, more than half the population lives in such dire straits.

Those numbers are steadily decreasing, he said, but the goal he has put before the World Bank is lofty: ending extreme poverty by 2030 while also addressing skyrocketing inequality and lowering greenhouse gas emissions.

"We must also ensure that economic growth in the years ahead is sustainable and takes us off the destructive path of climate change," Kim said. "Climate change could reverse hard-won development gains and could stop our end-poverty efforts completely. We can't end poverty unless we take serious steps to protect our planet."

Kim and the institution itself have won widespread praise for squarely taking on climate change. Last year, after a lengthy battle with environmentalists, the World Bank moved decisively away from coal, declaring it would only fund new coal plants in rare circumstances.

"A remarkable thing has happened at the World Bank over the past 15 years," World Resources Institute President and former World Bank climate envoy Andrew Steer said recently.

Working to identify climate risks
Recalling that the bank's kiosk was trashed by activists at the 1992 Rio Earth Summit, he declared that these days, "There's very little serious criticism of the World Bank." Still, Steer said, while the institution has come a long way on social issues, "it is still, quite frankly, getting on the right path with climate change."

A new WRI study, in fact, finds that the bank does not put climate change at the center of its work. Using a representative sample of 60 projects spanning energy, transportation and other areas of the development agency's work, WRI found that 75 percent of projects did not incorporate climate risks into the design.

Citing as an example an urban infrastructure improvement project in a municipality of China, WRI researcher Milap Patel said, "without even a risk screening, we didn't know whether this project was vulnerable to climate change."

Karin Kemper, director of climate policy and finance at the World Bank said that's something the institution is working to change, saying at the report's release, "a number of things in the report are actually already happening as we speak."

As part of a new mandate to weave climate considerations into all projects, Kemper said, all future projects for the poorest countries will be screened for whether they worsen a community's vulnerability to climate change. Meanwhile, she said, accounting for the carbon emissions of all projects is on the near horizon.

"We have sent ourselves a goal ... by 2016, we will have greenhouse gas accounting in all sectors across the bank," she said.

Coal plant in Kosovo
Meanwhile, for many other environmental groups, the fight at the World Bank against coal isn't over. The bank is still expected to approve a new 600-megawatt coal plant in Kosovo, which is being fought bitterly by activists who this week released a report claiming it will displace 7,000 people and damage the country's economic health.

Oil Change International, another environmental organization, said that as the bank shifts away from coal, it is taking a larger and troubling interest in natural gas and big hydropower projects. According to the group's latest figures, the bank spent $1 billion in fossil fuel exploration last year.

"We may see a certain shift of resources from coal where the World Bank is pretty much exiting to big hydropower," said Peter Bosshard of International Rivers, which has been fighting a major new dam project in the Democratic Republic of Congo. Bosshard argued that much of the energy the World Bank helps to develop in poor countries winds up fueling extractive activities or is directed at urban centers.

He and others argued that at least 50 percent of the bank's energy lending should be aimed at access for the rural poor, focusing on small and decentralized electricity projects. Currently, the group Oil Change International found that 8 percent goes toward decentralized energy.

Argued S. Vijay Iyer, director of the World Bank's sustainable energy department, poor countries are telling the bank they want more than small decentralized energy can provide. Meanwhile, he said, the bank is focused on providing affordable energy—and until renewable energy costs come significantly down, simply substituting expensive clean energy for expensive dirty energy is not the answer.

"I'm not saying we should not look for solar and wind solutions where they are available, but the driver should be access and affordability," he said.